The world of golf braces for a tough year as corporate sponsors tighten their belts and golfers cut costs
From the Print Edition:
Fred Thompson, March/April 2009
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"When we start into a downturn and companies are reducing their expenditures in advertising and marketing and sponsorship, they are going through a process of deciding what's more valuable to them, where they get the most value to the dollar spent," he said.
"In my experience, every time there was a downturn there was even more scrutiny than the last time, and there's better scrutiny. . . . We have performed very well in that regard because of our value model. In terms of spending a dollar with the PGA Tour versus spending a dollar with X sport or Y sport, we come out very well. The first step is to win that contest and come out ahead."
Larry Peck, the promotions manager for Buick and Pontiac, oversees Buick's very large commitment to golf. In the fall, Buick and Tiger Woods announced they were severing their relationship, that an endorsement contract thought to pay Woods in the neighborhood of $9 million a year was going to end prematurely. The PGA Tour credits Buick as its first corporate sponsor, in 1958, and Peck says Buick has no plans to get out of the game, but it will be cutting back. Currently, Buick sponsors the Buick Invitational in San Diego and the Buick Open in Michigan. In 2008, it had 20 official car deals with tournaments. In 2009, it will have just five. And it won't have Tiger anymore.
|Ernie Els has 16 career wins in the United States.|
"In the economy now more than ever we have a need to promote our new products, specifically in 2009 at the Buick Invitational and Buick Open to promote our new Lacrosse," says Peck.
"That said, we have also made a number of cuts, most notably our nine-year relationship with Tiger Woods. . . . I've got nothing to say other than great things about Tiger. We grew with him, he grew with us. You put Tiger in an ad, people tended to watch. There are 50 million—plus golf enthusiasts in the country, with strong demographics for an upscale automotive brand that wants to promote itself to that audience. The PGA Tour provides a good means to reach it."
The PGA Tour has reached out to its players, asking them to consider playing more tournaments and participating within events at those tournaments outside of showing up on the first tee and signing a few autographs by the scorer's cabin. Ernie Els, one of the most affable and savvy of players, understands the need to do more.
"These are crazy times," says Els. "[My company] is locked in, thank goodness, through 2010, with most of our sponsors. We've got to thank them again, just to be sponsoring us, all of this money we play for and there's a lot of people losing their jobs. So what we are doing, we should almost feel guilty, because it's really tough out there and we've got to be thankful for what we've got, and I think the players do realize that."
Carolyn Bivens, commissioner of the LPGA Tour, is working feverishly to remind her sponsors that the LPGA provides a quality platform for them. The LPGA Tour hasn't flourished as robustly as the PGA Tour, and Annika Sorenstam (now retired) couldn't bring the big numbers to the LPGA like Woods did to his tour. The LPGA does not have a fat domestic television rights contract to feast from, instead having to fund its own broadcasts in conjunction with its tournament sponsors. The tour will offer $55 million in prize money in 2009, about a fifth of the prize money of the PGA Tour. A third of the LPGA schedule is played outside the United States, primarily in the Pacific Rim and Europe, as officials search for sponsors wherever they can find them.
The economy cost the LPGA four tournaments on its 2009 schedule—the ADT Championship, the Fields Open and the Ginn Open and the Ginn Tribute. (The PGA Tour also lost an event sponsored by Ginn, the troubled resort and high-end residential company.)
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